The economic and technical feasibility of a hybrid distillation-membrane system applied to the separation of ethanol from water in traditional dry-grind corn ethanol facilities was studied. The current distillation technology was modeled in Aspen Plus and the proposed membrane unit in gPROMS. A system with the membrane placed after the distillation column with the membrane retentate recycled to the column feed was determined to be the most suitable for the separation requirements of this industry. Sensitivity analyses were performed to assess the effect of key membrane performance parameters such as flux, selectivity and cost on the economic feasibility of this system. These allowed for appropriate technical and economic performance targets for the membrane to be determined.